In early trading, US stocks were on the rise with eyes on the Fed, ahead of the announcement that will determine when the interest rates will be increased by the central bank.
According to ABC News, the Dow Jones Industrial average increased 0.1% or 15 points to 17,146. The Standard & Poor’s 500 index increased 0.1% or 2 points to 2,001 while the Nasdaq composite increased 0.1% to 4,557.
There have been worries about the conclusion of the Federal Open Market Committee meeting, which have impacted on market function in the last few days. The People’s Bank of China lifted sentiments on Wednesday after its initiative to inject billions of funds into its banking system in a bid to boost the slumping growth.
The Fed will wrap up its two-day meeting later in the day by issuing a statement and holding a press conference.
Investors welcomed the unexpected decline in consumer price index, the key measure of inflation. The belief is that the decreasing inflation will embolden the Federal Reserve to keep its interest rates low much longer.
Palisade Capital Management chief investment officer, Dan Veru, was surprised that the stock market had not edged higher.
Market Watch quoted Veru as having said, “If you are bearish, it means you expect a big policy change from the Fed. The conditions are just not right for that to happen. Data have been inconclusive and certainly do not indicate that the economy is growing faster. We expect the Fed to stay in position in terms of interest rates.”
IG market analyst, Chris Beauchamp said the market, just as it was two weeks back, will be left complacent on the interest rates if there sticks a “considerable time” phrase. He added that it could mean equity markets would receive a boost after fretting about the Fed plans.
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